During turbulent times, Wall Street traders have turned into to the bottle—but not to drink.
Investors have begun looking into alternative assets amidst this bleak economy, and alcohol has always been a staple with consistent demand and prices dictated by its limited supply and scarcity. In fact, wine and high spirits have outperformed gold and the S&P 500, proving to be recession-proof after weathering through all macroeconomic events.
More people are drinking far more than ever before, driving the demand for diverse and innovative beverages. Whisky has been a core investment for a select group for a longest time, while a newfound appreciation for wine and quality spirits has also pumped up prices.
Consumers have elevated their cocktail game as they experiment as mixologists in their own homes, hyping up the demand for super-premium alcohol. Sales of high-end spirits increased by 47 per cent in 2021, doubling the average rate of 18 per cent from the last five years. Historically consumers favoured the so-called brown spirits like whisky and bourbon for investment; nowadays investors are putting their money into white spirits such as vodka, tequila, and gin. The global premium spirit market size is valued to be US$235.7 billion by 2027, with an impressive compound annual growth rate (CAGR) of 10.3 per cent during the forecast period.
Old School Meets New Money
Wine and spirit NFTs are the new thing among crypto traders. While you cannot digitise liquids per se, you can digitise the documentation of its authenticity on the blockchain. One digital marketplace is doing just that, and is offering direct-to-consumer liquor through NFTs.
BlockBar is a platform that sells liquor from luxury brands as digital assets including Hennessy, Ardbeg, The Dalmore, Johnnie Walker, Rémy Martin, and Penfolds. As the original creator, brands mint their own NFTs using BlockBar’s proprietary smart contract to prove its authenticity. Each NFT corresponds to an actual physical bottle, exclusive to BlockBar, and is available to purchase with Ethereum (ETH) and new options recently launched, through credit card or wire transfer. Owners can resell, collect, gift or at any point ‘burn’ their NFT in exchange for the physical bottle, shipped globally from their state-of-the-art storage facility in Singapore.
The number of wine and spirit collectors grew by 582 per cent in the last ten years, yet there is still no way to prove authenticity or ownership. BlockBar aims to eliminate fake bottles in the trade and create a level playing field for new and experienced collectors while democratising the traditional fine wine and spirits industry. “We began exploring the world of NFTs and became instantly hooked. We saw a lot of brands were diving into the NFT space and so we wanted to find a role for NFTs to solve a real problem within the wine and spirits industry—transparency, authenticity, quality assurance, and storage” explains Dov Falic, co-founder & CEO of BlockBar.